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Abhishek Bansal, 24, comes across as a guy next door.

Wearing a untucked black shirt, worn out black jeans, a pair of toe-covering sandals, and a rakhi (a band of brotherhood tied to the wrist by a sister during an Indian festival), it is easy to miss him in a crowd.

But he isn’t the guy next door.

His business-to-business (B2B) hyperlocal logistics startup Shadowfax recently raised US$8.5 million in series A funding, from Fidelity International’s investment arm Eight Roads Ventures. This happened less than a month after the Gurgaon-based company secured angel funding from Snapdeal co- founders Kunal Bahl and Rohit Bansal, Zishaan Hayath of Powai Lake Ventures, and Prashant Malik of Limeroad.

Abhishek had, along with his college mate Vaibhav Khandelwal, launched Shadowfax only in May this year. Talking to Tech in Asia over a cup of hot coffee at Starbucks in a Mumbai suburb, Bansal spoke about how he is living his “life on the edge,” as an entrepreneur.

Bansals of the Bania community

The surname Bansal, which belongs to the Bania trading community in India, suggests that his entrepreneurial streak is not serendipity in action. Sachin Bansal and Binny Bansal of Flipkart, Rohit Bansal of Snapdeal, Mukesh Bansal who founded Myntra – all of them belong to this traditional trading sect of the country.

Shadowfax, named after the The Lord of the Rings’s horse who can interpret human language, is looking at “uberization of delivery boys,” according to Abhishek. Its value proposition is to cut costs of merchants on the logistics front. ‘We tell our clients “you don’t have to hire delivery persons for your company.’ We can provide them that,” says Abhishek.

Many are trying to provide this service, but few succeed in scaling up fast.

Earlier this month, Shadowfax acquired the entire team of Pickingo, a smaller rival which was operating in the same sector but had to close down. “We were looking to hire senior people for our startup and this was a good fit as the founders of Pickingo are IIT (Indian Institute of Technology) alumni,” says Abhishek.

The attrition challenge

Shadowfax is in an industry where attrition is extremely high. “Every day we face problems. But that doesn’t mean that I will back off. I enjoy solving problems,” says Abhishek, who worked in his friend’s night delivery startup before venturing out on his own. And to the problem of attrition, he claims to have found a solution.

“Ours is an industry where the first month attrition is 22 percent. But at Shadowfax, it is less than 1 percent,” he says.

How did he manage it? Culture has a lot to do with it.

Abhishek wanted every delivery boy to come in formals to work. “When they go back home, their parents should not feel that their son is doing some rugged street job,” says Abhishek. He is trying to convince them that a delivery job can be a respectable, full-time one.

“You can proudly say that you have a full-time job where you are well-groomed and treated properly,” says Abhishek.

But that’s not all. “A delivery boy can quickly rise to become a manager who earns INR 30,000-35,000 (US$460-530) a month,” says Abhishek, who realizes this is a lot of money for the underprivileged segment of India’s population. India’s average income per person is US$130 a month, according to World Bank data.

Abhishek developed a model of attracting and retaining talent with help from Pratham, a Mumbai-based NGO which provides vocational training to underprivileged youth.

At Shadowfax, a delivery boy who spends three months at the company can become a team leader, and if he continues for a few more months, he can become a manager. There are no eligibility criteria in terms of academics.

The startup has even hired call center employees and engineers as part-time delivery boys who work four hours or so in a day.

Trying to be different

Abhishek always wanted to do something different. Debabrat Mishra, Director of global management consultancy Hay Group, who worked with Abhishek, recalls, “He was always a high energy person. He used to question a lot, like ‘why are we doing it like this?’ He was always bubbling with ideas.”

Now he’s bringing new ideas to the logistics business. Abhishek says Indians see the delivery job as a makeshift arrangement and he wants to change that mindset.

“We want it to be more aspirational for the delivery workers. So we had counselling sessions for employees. We created career plans for them. There is a month-on-month review on attrition,” says Abhishek, who hopes this hiring and retaining model pay dividends.

At present, the delivery boys work from 9 am to 12 midnight in various shifts. There are 12-hour shifts, eight-hour shifts, and four-hour shifts. The boys make deliveries on their own bikes, sometimes bought with financial assistance from Shadowfax. Depending upon the city, they get INR 40- 45 (US$0.61-0.69) per delivery.

Shadowfax has over 1,000 delivery boys on the ground across three cities – Delhi, Mumbai, and Bangalore.

Gearing up for a bigger play

Shadowfax is not the only one on the ground. Roadrunnr, a similar startup based out of Bangalore, represents tough competition for Shadowfax. It raised US$11 million in July from Sequoia Capital, Nexus Venture Partners, and Blume Ventures. Delhivery and Grofers are two other big boys in the field.

“Roadrunnr is a major competitor,” admits Abhishek, “but this is a billion dollar market and there is space for more than one player.”

And that is why Abhishek is gearing up for a bigger play. It is setting up a research and development facility in Bangalore for data analytics. “We want to eliminate manual intervention completely. We are working on an algorithm to achieve that,” says Abhishek, who wants to expand to other Asian countries in the coming years. “Labour intensive locations like China, the Middle East, and Southeast Asia are suitable for our business.”

But first he wants to crack India. Abhishek’s startup has tie-ups with 175 outlets across the country. From three cities now, he wants to expand to 10-15 cities by the end of this financial year. “Everyone needs delivery and we are making it cost-efficient and convenient.”

The boy who grew up in Meerut, a small town in India’s northern state of Uttar Pradesh, is dreaming big.

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